We would like to draw your attention to the recent homogenisation of tax authorities’ approach to the VAT treatment of “services connected with immovable property”. These include mainly installation, assembly, repair, supervision and inspection of equipment which is or will as a result of the services be part of the property.

Generally, services connected with immovable property situated in Poland are subject to Polish VAT (Article 28e of the VAT Act).

The VAT Act does not define “services connected with immovable property”. The relevant provisions are set out in Council Implementing Regulation (EU) No 1042/2013 of 7 October 2013 (“Regulation”), which lists services connected with immovable property, such as:

  • the installation or assembly of machines or equipment which, upon installation or assembly, qualify as immovable property;
  • the maintenance and repair, inspection and supervision of machines or equipment if those machines or equipment qualify as immovable property.

According to Article 13b of the Regulation, immovable property includes, without limitation, any item, equipment or machine permanently installed in a building or construction which cannot be moved without destroying or altering the building or construction.

In reliance on those provisions, tax authorities have recently started to uniformly hold in their rulings that there is no connection with immovable property in the case of services that apply to equipment which can be:

  • in any way detached from the property,
  • removed without permanent and irreversible damage to the equipment itself or the property,
  • removed from one property and reinstalled in another.

Accordingly, services involving installation, assembly, repair, supervision and inspection as above should be taxed under the general rule, i.e. basically in the country where the customer has established his business (Article 28b of the VAT Act).

Given the said approach of tax authorities, we believe it is advisable to review individually each project involving such services as installation or assembly of any machinery or equipment in immovable property.

If this issue pertains to your business and you are interested in our assistance, please contact us.

This blog post is provided for general information purposes to keep you up-to-date with changes in tax law, tax rulings by authorities, case law of courts and interesting commentaries. Doradztwo Podatkowe WTS&SAJA shall not be held legally liable for any acts or omissions resulting from reliance on such information.